Introduction
As the name suggests, the focus is to invest in companies that have high quality financials, business and management whilst the stock is also available at the right price.
The purpose is to invest in 15-22 companies that can Multiply Your Wealth in the next 3-5 years.
Investment Drivers
The theme of the portfolio is to invest into companies that can reap benefit from various government schemes and at the same time promote the philosophy of “Atmanirbhar Bharat”.
The purpose of Atmanirbhar Bharat is to make India a bigger and more important part of the global economy” pursuing policies that are efficient, competitive, resilient and self-sustaining and self-generating. Herein we also focus on China plus one strategy as a lot of companies are moving their businesses out of China and are instead setting up plants in India.
Emphasis is also put on companies that can leverage the productivity linked incentive schemes or the interest subvention scheme of the government. This helps in improving the financial soundness of new ventures (inturn making them profitable) and as well as helping boost the Indian economy.
Investment Philosophy
To make sure the companies fit into the use case, they must fulfill multiple criterias.
Only those companies are chosen that have sound financials and this is made sure by picking only those stocks that have low debt on books. D/E ratio is an essential screening criteria here.
Further, it is paramount that the companies are available at a reasonable valuation so that profits can be maximized. It is also made sure that the management of such companies have strong integrity, is capable and has overall good corporate governance.
Companies are chosen which are well researched and whose news is easily available.
Anti fragility: We constantly look for businesses which have survived through at least one downcycle. This gives us confidence in the underlying business model and its strengths. A strong balance sheet adds to this thesis, as in a downturn, it helps in survival, but in an economic upcycle, a strong balance sheet enables businesses to grab big opportunities.
Who should invest in this smallcase?
This smallcase can help investors who are looking for returns over a period of 3-5 years get high returns but with returns also comes risk. It’s important to understand that these stocks are volatile and fluctuate regularly. Although we are bullish on them in the long run, it’s possible to witness high volatility depending upon the market condition. Short term volatility may be witnessed but by sticking for 3-5 years, the investor can most certainly witness capital appreciation. So investors who are looking for high returns and don’t mind onboarding volatility can definitely invest in this.